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Clock is ticking for any Cedar Fair buyers

SANDUSKY
There's just one shopping day left until Christmas.
But if you want to buy a

Tom Jackson

Mar 8, 2010

SANDUSKY

There's just one shopping day left until Christmas.

But if you want to buy an amusement park chain with 11 amusement parks and six water parks, there's still about 32 shopping days left.

Cedar Fair has 40 days from Dec. 16 -- the day it signed an agreement to be acquired by an affiliate of Apollo Global Management -- to consider other offers. That period runs through Jan. 25, said Stacy Frole, director of investor relations for Cedar Fair.

"It's referred to as a go-shop period," she said.

If you want a chance to buy Cedar Fair, you'd better have a lot of money.

Apollo has offered $11.50 per unit and is taking on all of Cedar Fair's debt.

That adds up to a deal worth $2.4 billion, give or take a few pennies.

Some analysts suggest Apollo's offer is a bit low.

Cedar Fair must win approval from at least two-thirds of the unitholders for the deal to go through.

George Andrew Karolyi, professor of finance and global business at Cornell University, said the offer seems fair. He noted that $11.50 is a 28 percent premium over the closing price when the offering came out.

"A typical premium in most of these types of transactions is 20 percent," Karolyi said. "It's hard to imagine in this environment people would price it up much higher than that."

Karolyi said he assumes other companies are looking at whether to try to top Apollo's offer.

The BlackStone Group, which like Apollo is a private equity company headquartered in New York City, bought SeaWorld Parks and Entertainment late this year. It completed the transaction Dec. 1.

"I'm sure they're probably asking themselves whether they should make a move on this Cedar Fair investment," Karolyi said. "I don't see why they wouldn't. If they are making a serious push in this business, then why not?"

Assuming that a better offer doesn't come along, unitholders will be mailed proxy statements in February that include a ballot to vote on the Apollo deal, Frole said.

The unitholders may mail their ballots in, vote using the Internet or vote over the telephone, Frole said.

Each unit represents one vote, and the deal with Apollo must be approved by owners of two-thirds of the outstanding units.

"It's very important for everybody to vote," Frole said. "Like an election, every vote matters."

The board of directors and Cedar Fair's management team are in support of the deal, Frole said, encouraging people to read the proxy statement when they receive it.

Filed by Jan. 8, the Securities and Exchange Commission will have 30 days to review the proxy statement before it's mailed. When it's filed, though, it will be a public document, available at the SEC's Web site.

John Sprau, a unitholder involved in a civil lawsuit that seeks to halt the Apollo deal, said he looks forward to reading the proxy statement.